Exploring the State of CX Personalization

Are brands ramping up their investment in AI and CX personalization? Medallia Market Research teamed up with CXPA to conduct global research on the current state of CX personalization — and we discovered some intriguing trends and insights.

Thanks to smarter AI, brands can now better personalize interactions with their customers on a larger scale, with the potential to make every experience tailored to individual preferences. The possibilities are endless — and this is just the beginning. 

With certain personalization technology (like generative AI tools) being so new, it’s fair to ask: Are the world’s leading brands staying ahead of these trends? And what does this look like for the practitioners who need to gain executive buy-in and implement this new generation of CX personalization? 

To explore these questions further, our Medallia Market Research team recently partnered with the Customer Experience Professionals Association (CXPA) to look into the current state of personalization among brands worldwide. This research, combined with prior Medallia research about how consumers feel about personalization, has shown us that there’s still a huge opportunity for brands to greatly improve the level of personalization they deliver to their customers — and why it’s worth the investment.

Let’s dive into the research.

Which types of CX personalization should brands focus on?

To start, let’s look at what consumers think of the level of personalization that they see in their buying journeys. Through previous research, we’ve discovered that these elements improve consumer satisfaction the most:

• Continuity of knowledge, or the seamless recall of the customer’s history and requests across channels and service interactions, without needing to provide the same information over again
• Rewards and recognition, or value-based appreciation based on customer loyalty status and milestones
• Flexibility of service, or service channel and payment methods options, plus forgiveness for deviating from the ideal process for payments and returns

As consumers ourselves, we’ve all experienced the joy of an effortless transaction with a brand, whether it’s with a healthcare provider, retail store, airline, or hotel — but if you suspect these highly personalized experiences are still rather rare in most industries, you’d be correct! Here’s how consumers rank personalization across industries:

And brands know this — only 24% of CX practitioners believe their personalization capabilities are high, similar to how only 1 in 4 customers find their brand interactions to be highly personalized. 

Now let’s explore some of the other interesting findings from our research.

3 key takeaways from the 2024 State of Personalization report

1. Advanced CX personalization is associated with higher revenue potential

CX leaders who reported their brand’s personalization capabilities being the

highest are two times as likely to achieve major revenue growth (10%+) than brands that report their capabilities lower.

Many of these brands believe they at least deliver baseline personalization, reporting that their capabilities are higher for personalized content and recommendations (63%) and experience orchestration (55%), than for other popular customer experience capabilities like predictive churn modeling (47%), next best action (44%), and generative AI customer communications (33%).

2. CX professionals say improving personalization is their top priority this year

Brands are getting privy to the importance of tailoring experiences for customers: Personalization is the number one business priority in 2024. 

Other plans they’re considering, including making better use of existing data sources and improving generative AI, can contribute to improving CX personalization, but overall these leaders believe delivering more personalization is imperative — even over optimizing advertising spend or new product development. 

3. More brands are investing in AI than last year

Over a third of CX leaders, including smaller companies under $25m in annual revenue, say their organization will be making significant AI investments for 2024, which is a notable increase over last year. 

And while public discourse is still abuzz about generative AI, these leaders are also recognizing AI’s potential in other use cases, such as advancing the quality and speed of data analysis, automating actioning for customer interactions (31%), and segmenting their customer base (25%). 

Is your organization investing in CX personalization?

No matter where your brand is on the CX personalization maturity curve, it can be helpful — if not downright illuminating — to explore the current sentiment of similar practitioners, across industries and geographies. Many face similar obstacles when driving forward personalization, like budget constraints and concerns about process change disruption. 

Understanding the current state of CX personalization can help drive change within your organization. Go ahead and dig deeper into the Medallia Market Research and CXPA report: The 2024 State of CX Personalization